NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 3, 2024
The 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Nine Energy Service, Inc. (the “Company,” “we” and “our”) will be held at 8:00 a.m., Central Time, on May 3, 2024, at 2001 Kirby Drive, Suite 200, Houston, Texas 77019, for the following purposes:
1. To elect three Class III directors to serve until the Company’s 2027 Annual Meeting of Stockholders or until their respective successors are elected and qualified;
2. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;
3. To approve, on an advisory basis, the compensation of our named executive officers (“say-on-pay”);
4. To approve, on an advisory basis, the frequency of future say-on-pay advisory votes; and
5. To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
The Board of Directors of the Company (the “Board”) recommends you vote (i) “FOR” the election of each of the nominees named in the accompanying proxy statement to the Board, (ii) “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024, (iii) “FOR” the approval, on an advisory basis, of the compensation of our named executive officers and (iv) “FOR” the option of “1 YEAR” as the preferred frequency for future say-on-pay advisory votes.
The Board has fixed March 6, 2024 as the record date for determining stockholders entitled to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. Only stockholders of record at the close of business on that date will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. The Annual Meeting will begin promptly at 8:00 a.m., Central Time. Check-in will begin at 7:45 a.m., Central Time, and you should allow ample time for the check-in procedures.
Your vote is very important. Regardless of whether you plan to attend the Annual Meeting, we hope you will vote as soon as possible in advance of the Annual Meeting by one of the methods described in the accompanying proxy statement.
By Order of the Board of Directors
Ann G. Fox
President, Chief Executive Officer and Director
Houston, Texas
March 8, 2024
Important Notice Regarding the Availability of Proxy Materials for the Nine Energy Service, Inc. Stockholder Meeting to be Held on May 3, 2024:
The proxy materials, including our 2023 Annual Report, are available at https://investor.nineenergyservice.com.
PROXY STATEMENT
FOR
2024 ANNUAL MEETING OF STOCKHOLDERS
OF
NINE ENERGY SERVICE, INC.
To Be Held on May 3, 2024 at 8:00 a.m., Central Time
GENERAL INFORMATION
This proxy statement (this “Proxy Statement”) contains information related to the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Nine Energy Service, Inc. (either individually or together with its subsidiaries, as the context requires, the “Company,” “Nine,” “we,” “us” and “our”).
On or about March 15, 2024, we will send you a Notice of Internet Availability of Proxy Materials, which will provide instructions on how to view our proxy materials over the Internet and, if desired, request a full set of printed materials by mail. The Securities and Exchange Commission (the “SEC”) permits companies to send such a notice instead of a full printed set of proxy materials. We believe this process expedites the delivery of proxy materials, ensures that proxy materials remain easily accessible to our stockholders, saves costs and reduces the environmental impact of the Annual Meeting.
Meeting Date and Location
The Annual Meeting will be held at 8:00 a.m., Central Time, on May 3, 2024, at our principal executive offices, located at 2001 Kirby Drive, Suite 200, Houston, Texas, 77019.
Cameras, recording devices and other electronic devices are prohibited at the meeting.
Outstanding Securities; Record Date
Only holders of record of our common stock, par value $0.01 per share, at the close of business on March 6, 2024, the record date, will be entitled to notice of, and to vote at, the Annual Meeting. On that date, we had 35,324,861 shares of common stock outstanding and entitled to vote. Each share of our common stock is entitled to one vote for each director nominee and one vote for each other item to be voted on at the Annual Meeting.
Proxy Voting
Shares that are properly voted via the Internet or by telephone or for which proxy cards are properly executed and returned will be voted at the Annual Meeting in accordance with the directions given or, in the absence of directions, will be voted in accordance with the recommendations of the Company’s Board of Directors (the “Board” or the “Board of Directors”) as follows: (i) “FOR” the election of each of the nominees named herein to the Board as a Class III director, (ii) “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024, (iii) “FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers (as defined in “Executive and Director Compensation”) as described in this Proxy Statement (“say-on-pay”) and (iv) “FOR” the option of “1 YEAR” as the preferred frequency for future say-on-pay advisory votes. It is not expected that any additional matters will be brought before the Annual Meeting, but if other matters are properly presented, the persons named as proxies in the proxy card or their substitutes will vote in their discretion on such matters.
1
What Vote Is Required to Ratify the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2024?
Approval of the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 requires the affirmative vote of the holders of the majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. You may vote “for” or “against” this proposal, or you may abstain from voting on this proposal. Abstentions will be counted as present in person or represented by proxy and entitled to vote and, thus, will have the same effect as votes against this proposal. We believe this proposal is a “routine” matter, and as a result, we do not expect there to be any broker non-votes for this proposal.
What Vote Is Required to Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers?
Approval, on an advisory basis, of the compensation of our Named Executive Officers requires the affirmative vote of the holders of the majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. You may vote “for” or “against” this proposal, or you may abstain from voting on this proposal. Abstentions will be counted as present in person or represented by proxy and entitled to vote and, thus, will have the same effect as votes against this proposal. Broker non-votes will not affect the outcome of the vote on this proposal. Although this advisory vote to approve the compensation of our Named Executive Officers is non-binding, the Nominating, Governance and Compensation Committee of the Board (the “Nominating, Governance and Compensation Committee”) will review and consider the voting results when making future decisions regarding our executive compensation program.
What Vote is Required to Approve, on an Advisory Basis, the Frequency of Future Say-on-Pay Advisory Votes?
You may vote for a frequency of every “one year,” “two years” or “three years” for future “say-on-pay” advisory votes, or you may abstain from voting on this proposal. The frequency receiving the affirmative vote of the majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter will be deemed to be the recommendation of our stockholders. If no frequency receives such majority support, the frequency that receives the most votes will be deemed to be the recommendation of our stockholders. Abstentions and broker non-votes will not be voted either for or against any frequency and, accordingly, will not affect the outcome. Although this advisory vote to approve the frequency of future “say-on-pay” advisory votes is non-binding, the Board and the Nominating, Governance and Compensation Committee will review and consider the voting results when making a determination concerning the frequency of future say-on-pay advisory votes.
Whom Should I Contact with Questions about the Proxy Materials or the Annual Meeting?
If you have any questions about the proxy materials or the Annual Meeting, please contact Nine Energy Service, Inc. at 2001 Kirby Drive, Suite 200, Houston, Texas 77019, Attn: Secretary or by email at Investors@nineenergyservice.com.
5
PROPOSAL 1 — ELECTION OF DIRECTORS
The Board is currently comprised of eight members. Our directors are divided into three classes, designated as Class I, Class II and Class III, serving staggered three-year terms, with two members in Class I and three members in each of Class II and Class III. At each annual meeting of stockholders, directors will be elected to succeed the class of directors whose terms have expired.
Mark E. Baldwin, Ernie L. Danner and Ann G. Fox are assigned to Class III and are standing for election at the Annual Meeting. Curtis F. Harrell and Darryl K. Willis are assigned to Class I and will stand for election at our 2025 Annual Meeting of Stockholders, and Scott E. Schwinger, Gary L. Thomas and Andrew L. Waite are assigned to Class II and will stand for election at our 2026 Annual Meeting of Stockholders.
The Board, based on the recommendation of the Nominating, Governance and Compensation Committee, proposed that the following three nominees be elected as Class III directors at the Annual Meeting, each of whom if elected will hold office until our 2027 Annual Meeting of Stockholders and his or her successor shall have been elected and qualified, unless ended earlier due to his or her death, resignation or removal from office:
Each of the nominees is currently a director of the Company. In evaluating the nominees for the Board of Directors, the Board and the Nominating, Governance and Compensation Committee took into account the qualities they seek for directors, as discussed below under “Corporate Governance,” and the directors’ individual qualifications, skills, and background that enable the directors to effectively and productively contribute to the Board’s oversight of the Company. These individual qualifications and skills are included below in each nominee’s biography, which is contained in the “Directors and Executive Officers” section below.
Each of the nominees has indicated his or her willingness to continue to serve as a member of the Board, if re-elected. If, however, any of them should be unwilling or unable to serve (a contingency that the Board does not expect to occur), the Board may decrease the size of the Board or may designate substitute nominees, and the proxies will be voted in favor of any such substitute nominees.
Vote Required
Directors are elected by a “plurality” voting standard, which means that the three nominees for director who receive the greatest number of votes cast at the Annual Meeting will be elected as directors. You may vote “for” or “withhold” authority to vote for each of the nominees for the Board. Because the three nominees for director who receive the greatest number of votes cast at the Annual Meeting will be elected as directors and because “withhold” votes and broker non-votes are not considered votes cast for the foregoing purpose, “withhold” votes and broker non-votes will not affect the outcome of the voting on director elections.
Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH NOMINEE.
6
CORPORATE GOVERNANCE
Board Leadership
The Board is responsible for oversight of the Company and management. The Chairman of the Board is selected by the Board and the current Chairman is Ernie L. Danner, who is a non-employee director. Mr. Danner presides at all meetings of the Board, including executive sessions of the non-employee directors, subject to extraordinary circumstances. The Board has the flexibility to determine whether the roles of Chairman of the Board and Chief Executive Officer should be combined or separate. The offices of Chairman of the Board and Chief Executive Officer are currently separated. The positions of the Chairman of the Board and the Chief Executive Officer are not held by the same person and the Chairman of the Board is not an employee of the Company. The Board views this separation as a means to allow the Board to fulfill its role in risk oversight through a collaborative, yet independent, interaction with Company management.
Director Independence
As a public company, we are required to comply with the rules of the NYSE and are subject to the rules and regulations of the SEC, including Sarbanes-Oxley. The NYSE rules require listed companies to have a board of directors with at least a majority of independent directors. Additionally, each of the Audit Committee of the Board (the “Audit Committee”) and Nominating, Governance and Compensation Committee are required to be comprised solely of independent directors, as that term is defined by the applicable rules and regulations of the NYSE and SEC. Rather than adopting its own categorical standards, each year the Board assesses director independence on a case-by-case basis, in each case consistent with the applicable rules and regulations of the SEC and the NYSE. After reviewing all relationships each director may have directly and indirectly with the Company and its management, the Board has affirmatively determined that each of Messrs. Baldwin, Danner, Harrell, Schwinger, Thomas, Waite and Willis has no material relationships with the Company and, therefore, is “independent” as defined under the applicable NYSE rules and guidance. In addition, the Board previously determined that David C. Baldwin, who served on the Board until his resignation, which was effective as of August 3, 2023, had no material relationship with the Company and was “independent” as defined under the applicable NYSE rules and guidance. Ms. Fox, our President and Chief Executive Officer, is not considered to be “independent” because of her employment position with the Company. In addition, each of Messrs. Baldwin, Danner, Harrell, Thomas, Schwinger and Willis have been affirmatively determined by the Board to be independent under SEC rules and NYSE listing standards for the purposes of Audit Committee service. Moreover, each of Messrs. Baldwin, Danner, Harrell, Thomas, Schwinger, Waite and Willis have been affirmatively determined by the Board to be independent under SEC rules and NYSE listing standards for the purposes of Nominating, Governance and Compensation Committee service.
Risk Oversight
The Board believes that risk management is an integral part of setting and implementing our business strategy, which includes, among other things, identifying and assessing the risks and opportunities facing the Company. It is management’s responsibility to manage the Company’s risk exposure and potential impact of the many risks that are associated with our business and a primary function of the Board is to assist and oversee management in this effort. The Board, as a whole and also at the committee level, has oversight responsibility. The Board’s committees assist the Board in fulfilling its oversight responsibilities with respect to risks within its areas of responsibilities, as further discussed below. We believe the Board’s role in risk oversight is consistent with the Company’s leadership structure (as discussed under the heading “—Board Leadership”), with the CEO and other members of senior management having direct responsibility for risk management, and the remaining directors involved in providing oversight of management’s efforts to reduce, mitigate or eliminate the risks that we face.
The primary means by which the Board and its designated committees oversees our risk management structure and policies is through its regular communications with management and our internal audit department. In connection with the quarterly Board meetings, the full Board (or the appropriate Committee in the case of
13
risks that are under the purview of a particular Committee) receives regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal and regulatory, and strategic risks. The Chair of each of the Committees will discuss and review significant matters with management outside of the quarterly Board meetings as needed. When a Committee receives a separate report or the Chairman has separate discussions, the Committee Chairman may discuss that report with the full Board.
As part of its charter, the Audit Committee is responsible for reviewing and discussing our policies with respect to risk assessment and risk management generally, and also specifically with respect to financial reporting, internal controls and accounting matters, legal, tax and regulatory compliance and the internal audit function. The Audit Committee is responsible for ensuring that an effective risk assessment process is in place, and quarterly reports are made to the Audit Committee on material risks facing the Company. Upon request, both the full Board and Audit Committee may receive reports from those executive officers who are deemed responsible for particular risks due to being in a position that makes them most likely to be able to impact the effects of such risks. The Audit Committee also oversees our internal audit department, which is responsible for monitoring the Company’s adherence to our significant corporate policies and internal controls.
The Nominating, Governance and Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation and benefits policies and programs. The Nominating, Governance and Compensation Committee also assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with corporate governance, Board organization, membership and structure and succession planning for our Chief Executive Officer and other members of senior management.
Oversight of Strategy
Oversight of the Company’s business strategy and strategic planning is a key responsibility of the Board. The Board believes that overseeing and monitoring strategy is a continuous process and takes a multilayered approach in exercising its duties. The Board is committed to oversight of the Company’s business strategy and strategic planning, including work embedded in the Board committees, regular Board meetings and a dedicated meeting each year to focus on strategy. This ongoing effort enables the Board to focus on Company performance over the short, intermediate and long term, as well as the quality of operations. In addition to financial and operational performance, non-financial measures, including sustainability goals, are discussed regularly by the Board and Board committees.
While the Board and its committees oversee strategic planning, Company management is charged with executing the business strategy. To monitor performance against the Company’s strategic goals, the Board receives regular updates and actively engages in dialogue with our Company’s senior leaders. The Board’s oversight and management’s execution of business strategy are viewed with a long-term mindset and a focus on assessing both opportunities for and potential risks to the Company.
ESG Strategy
In 2023, the Company conducted a Sustainability Priority Assessment to identify key ESG-related issues important to the Company’s external and internal stakeholders and impactful to the Company’s business. This assessment has and continues to inform the Company’s ESG-related priorities, initiatives, and efforts.
In 2023, the Company engaged three external consultants to improve ESG-related policies, practices, and disclosures; compile Nine’s Scope 1 and 2 emission inventories, identify key software platforms for maintaining our emission data collection, and identify emission reduction opportunities to be included in the Company’s emission strategy; and assess and compile disclosures about Nine’s climate-related risks and opportunities aligned with the Task Force on Climate-Related Financial Disclosures (TCFD) framework.
The Company also adopted a Human Rights Statement and formalized a Biodiversity Statement. In addition to maintaining robust FCPA, Export-Import Sanctions, Code of Conduct and related corporate governance
14
policies, in 2023 the Nominating and Corporate Governance Committee amended its charter to include oversight of ESG-related risks, opportunities, and activities.
In 2024, the Board is focused on improving the Company’s performance and disclosure on key topics identified in the Sustainability Priority Assessment, including employee health and safety, waste and chemical management, water tracking and management, and emissions management.
The Board is also focused on implementing the Company’s emission reduction strategy identified in 2023, pursuant to the Company’s three-year plan to track and reduce emissions that commenced in 2022.
Board Meetings
The Board meets regularly during the year and holds special meetings and acts by unanimous written consent whenever circumstances require. During 2023, there were seven meetings of the Board. All incumbent directors attended at least 75% of such aggregate meetings of the Board and any committees on which they served occurring during 2023. Directors are encouraged to attend the Company’s annual meetings of stockholders, and each director then-serving attended the Company’s 2023 Annual Meeting of Stockholders.
Board Committees
The Board has established two standing committees: the Audit Committee and the Nominating, Governance and Compensation Committee, each of which is comprised entirely of directors who meet the applicable independence requirements of the NYSE rules and SEC rules applicable to such committee membership. These Committees keep the Board informed of their actions and provide assistance to the Board in fulfilling its oversight responsibility to stockholders. The table below provides current Committee membership information as well as meeting information for the last fiscal year.
|
|
|
|
|
Name |
|
Audit Committee |
|
Nominating, Governance and Compensation Committee |
|
|
|
Mark E. Baldwin |
|
X* |
|
|
|
|
|
Curtis F. Harrell |
|
X |
|
X |
|
|
|
Scott E. Schwinger |
|
|
|
X* |
|
|
|
Gary L. Thomas |
|
X |
|
X |
|
|
|
Darryl K. Willis |
|
X |
|
X |
|
|
|
Total Meetings in 2023 |
|
4 |
|
5 |
The functions performed by, and the duties of, the Audit Committee and the Nominating, Governance and Compensation Committee, which are set forth in more detail in their charters, are summarized below. The charters of these Committee are posted on the Company’s website at www.nineenergyservice.com under the heading “Investors” and the subheading “Corporate Governance.”
Audit Committee
The Audit Committee, which is a separately-designated standing committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), consists of Messrs. Baldwin, Harrell, Thomas and Willis, each of whom the Board has affirmatively determined meets the independence standards under the SEC rules and the NYSE listing standards applicable to members of audit committees. The Board has also determined that Messrs. Baldwin, Harrell, Thomas and Willis are each financially literate, as required by the NYSE listing standards, and satisfy the definition of “audit committee financial expert,” as set forth in Item 407(d) of Regulation S-K promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
15
The Audit Committee oversees, reviews, acts on and reports on various auditing and accounting matters to the Board, including: the selection of our independent accountants, the scope of our annual audits, fees to be paid to the independent accountants, the performance of our independent accountants and our accounting practices. In addition, the Audit Committee oversees our compliance programs relating to legal and regulatory requirements.
Under the Audit Committee’s charter, the primary function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities as to, among other duties: (1) the quality, integrity and reliability of the Company’s financial statements; (2) the Company’s compliance with legal, tax and regulatory requirements; (3) the Company’s compliance with the Company’s Corporate Code of Business Conduct and Ethics and Financial Code of Ethics; (4) qualifications, independence and performance of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report on the Company’s financial statements; (5) effectiveness and performance of the Company’s internal audit function; and (6) effectiveness and performance of the Company’s system of internal controls regarding finance, accounting, legal compliance and ethics.
Nominating, Governance and Compensation Committee
The Nominating, Governance and Compensation Committee consists of Messrs. Schwinger, Harrell, Thomas and Willis, each of whom the Board has affirmatively determined is independent under SEC Rules and NYSE listing standards.
This Committee identifies, evaluates and recommends qualified nominees to serve on the Board; develops and oversees our internal corporate governance processes; and maintains a management succession plan. This Committee also oversees the process by which salaries, incentives and other forms of compensation for officers and other employees are established and administers our incentive compensation plan.
The Nominating, Governance and Compensation Committee has the authority to engage a compensation consultant at any time if it determines that it would be appropriate to consider the recommendations of an independent outside source. During 2023, the Nominating, Governance and Compensation Committee chose to engage Compensation Advisory Partners, an independent compensation consultant. CAP reviewed both our executive compensation program and our non-executive director compensation program for 2023 and produced year-end compensation reports for the Nominating, Governance and Compensation Committee in the second quarter of 2023. These reports were utilized by the Nominating, Governance and Compensation Committee when making certain salary, incentive and year-end compensation decisions for the executives and the non-executive directors for 2023.
The Nominating, Governance and Compensation Committee has the authority to delegate to its Chair, any one of its members, or any subcommittee it may form, the responsibility and authority for any particular matter, as it deems appropriate from time to time under the circumstances. No executive officer except the Chief Executive Officer is present for or has input into the Nominating, Governance and Compensation Committee’s decisions regarding specific compensation awarded to members of executive management.
Director Nominations
The Nominating, Governance and Compensation Committee considers candidates for director who are recommended by its members, by other Board members, by stockholders, and by management. To assist it in identifying director candidates, the Nominating, Governance and Compensation Committee is also authorized to retain, at the expense of the Company, third party search firms and legal, accounting, or other advisors, including for purposes of performing background reviews of potential candidates.
Director Tenure and Composition
The Board does not have a mandatory retirement age or term limits for directors. We believe our stockholders benefit from continuity of directors. To ensure the Board continues to generate new ideas and
16
EXECUTIVE AND DIRECTOR COMPENSATION
The tables and narrative disclosure below provide compensation disclosure that satisfies the requirements applicable to smaller reporting companies, as defined in Regulation S-K promulgated under the Securities Act. As a smaller reporting company, we are required to provide a Summary Compensation Table, an Outstanding Equity Awards at Fiscal Year End Table, a Director Compensation Table and limited narrative disclosures.
Overview
In this section, we provide disclosure relating to the compensation of our Named Executive Officers during 2023. The tables and narrative disclosure below provide compensation information for the following executive officers (collectively, our “Named Executive Officers”):
|
• |
|
Ann G. Fox, President and Chief Executive Officer |
|
• |
|
David Crombie, Executive Vice President and Chief Operating Officer |
|
• |
|
Guy Sirkes, Senior Vice President and Chief Financial Officer |
|
• |
|
Theodore R. Moore, Senior Vice President, General Counsel and Secretary |
The compensation of our Named Executive Officers consists of a base salary, annual cash bonus opportunities, long-term incentive compensation in the form of equity awards and other benefits, as described below. Our Named Executive Officers are also eligible to receive certain payments and benefits upon a termination of employment under certain circumstances in accordance with the terms of their employment agreements.
Role of Compensation Consultants in 2023 Compensation Decisions
The Nominating, Governance and Compensation Committee, in overseeing the compensation of our non-employee directors and our executive compensation program, employs several analytic tools and considers information from multiple resources. Subject to Board approval in certain circumstances, the Nominating, Governance and Compensation Committee has the sole authority to make final decisions with respect to our executive compensation program, and the Nominating, Governance and Compensation Committee is not obligated to utilize the input of other parties.
The Nominating, Governance and Compensation Committee has the authority to engage a compensation consultant at any time if the Nominating, Governance and Compensation Committee determines that it would be appropriate to consider the recommendations of an independent, outside source. During 2023, the Nominating, Governance and Compensation Committee continued its engagement of Compensation Advisory Partners (“CAP”), an independent compensation consultant. CAP reviewed both our executive compensation program and our non-executive director compensation program for 2023 and produced compensation reports for the Nominating, Governance and Compensation Committee over the course of 2023. These reports were utilized by the Nominating, Governance and Compensation Committee when making certain compensation decisions for the executives and the non-executive directors for 2023.
CAP also provided the Nominating, Governance and Compensation Committee with recommendations and advice during the process of selecting an appropriate peer group for 2023 compensation purposes. The Nominating, Governance and Compensation Committee informed CAP that its general criteria for selecting a peer group consisted of:
|
• |
|
companies that are direct competitors for the same space, products and/or services; |
|
• |
|
companies that compete with us for the same executive talent; |
|
• |
|
companies in a similar Standard Industrial Classification (SIC) code or industry sector; |
26
below for more details regarding the severance benefits provided to our Named Executive Officers under the Employment Agreements.
Quarterly Cash Incentive Bonus Program
We maintain a quarterly cash incentive bonus program, pursuant to which our Named Executive Officers are eligible to receive performance-based bonuses based on achievement with respect to certain financial performance targets and potential cash bonuses determined by the Nominating, Governance and Compensation Committee.
Performance goals and related targets for the first, second, third and fourth quarters of 2023, each based on Adjusted EBITDA targets by service line and certain safety metrics, were established on January 23, 2023, April 6, 2023, July 7, 2023, and October 13, 2023, respectively. On May 1, 2023, it was determined that the relevant performance goals for the first quarter of 2023 were achieved at varying levels by service line. On July 28, 2023, it was determined that the relevant performance goals for the second quarter of 2023 were achieved at varying levels by service line. On October 13, 2023, it was determined that the relevant performance goals for the third quarter of 2023 were achieved at varying levels by service line. On January 12, 2024, it was determined that the relevant performance goals for the fourth quarter of 2023 were not achieved for our Named Executive Officers.
As a result, the Nominating, Governance and Compensation Committee approved the payment of three quarterly bonuses for 2023, under the quarterly cash incentive bonus program for each of the Company’s executive officers and certain other employees. The aggregate quarterly bonus payments to our Named Executive Officers consisted of the following amounts for 2023:
|
|
|
|
|
Named Executive Officer |
|
Total Quarterly Bonus Amount |
|
Ann G. Fox |
|
$ |
292,059 |
|
David Crombie |
|
$ |
180,869 |
|
Guy Sirkes |
|
$ |
142,776 |
|
Theodore R. Moore |
|
$ |
136,850 |
|
Employment Agreements
All of our Named Executive Officers have entered into employment agreements with the Company and the Employer. Ms. Fox entered into an amended and restated employment agreement on August 28, 2018, and Messrs. Crombie and Moore entered into amended and restated employment agreements on November 20, 2018. Mr. Sirkes entered into an employment agreement on March 31, 2020 in connection with his promotion to our Senior Vice President and Chief Financial Officer. We refer to the employment agreements herein collectively as the “Employment Agreements.”
The Employment Agreements provide for a three-year initial term with automatic renewals for additional one-year periods unless either the applicable Named Executive Officer or the Employer gives written notice of non-renewal at least 60 days prior to the expiration of the then-current initial term or renewal term.
The Employment Agreements provide for initial annualized base salaries and initial annual bonus opportunities under the Company’s cash incentive bonus program based on the achievement of certain performance targets established by the Board or the Nominating, Governance and Compensation Committee. Please see “Narrative Disclosure to Summary Compensation Table—Base Salary” and “Narrative Disclosure to Summary Compensation Table—Quarterly Cash Incentive Bonus Program” above for a discussion of our Named Executive Officers’ base salaries and the Company’s cash incentive bonus program, respectively. In addition, pursuant to the Employment Agreements, our Named Executive Officers are eligible to receive annual equity compensation awards pursuant to the Stock Plan on such terms and conditions as determined by the Board or a committee thereof. While employed under the Employment Agreements, the executives are eligible for certain additional benefits, including reimbursement of reasonable business expenses, paid vacation, and participation in the Company’s benefit plans or programs.
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The Employment Agreements provide for certain severance benefits upon a resignation by the applicable executive for “good reason” or upon a termination by the Employer without “cause.” Please see the section entitled “Additional Narrative Disclosure—Potential Payments upon Termination or Change in Control” below for more details regarding the severance benefits provided to our Named Executive Officers under the Employment Agreements.
The Employment Agreements also contain certain restrictive covenants, including provisions that create restrictions, with certain limitations, on our Named Executive Officers competing with the Company and its affiliates, soliciting any customers, or soliciting or hiring Company employees or inducing them to terminate their employment. These restrictions are generally intended to apply during the term of our Named Executive Officers’ employment with the Company and for the one-year period following termination of employment.
The Stock Plan
The Stock Plan is a long-term incentive plan pursuant to which awards, including stock options, stock appreciation rights, restricted stock, performance awards, restricted stock units, bonus stock, dividend equivalents, other stock-based awards and cash awards, may be granted to certain employees and other service providers of the Company and its subsidiaries. We provide grants of equity-based awards and long-term cash-based awards to our employees (including our Named Executive Officers) and our non-employee directors pursuant to our Stock Plan in order to align their interests with those of our stockholders.
On May 5, 2023, our stockholders approved an amendment to the Stock Plan, which includes (i) an increase of the number of shares of the Company’s common stock that may be issued under the Stock Plan by 2,000,000 shares, (ii) a prohibition on share recycling with respect to options and stock appreciation rights, (iii) a prohibition the payment of dividends on unvested awards for all equity award types, and (iv) a clarification that the vesting of time-based and performance-based equity awards will not be automatically accelerated in connection with a “Corporate Change” (as defined in the Stock Plan).
Transaction Bonuses
Our Named Executive Officers were previously granted cash awards, which vested upon the Nominating, Governance and Compensation Committee’s certification of the level of achievement of certain performance goals tied to a capital raise or refinancing transaction, subject to the continued service of each Named Executive Officer through the date of such certification. These awards vested in connection with the redemption of the Company’s 8.750% Senior Notes due 2023, amendment of the existing asset-based revolving credit facility and offering of 300,000 units, each completed in January 2023, and were paid on February 24, 2023. The cash award for each Named Executive Officer is as follows:
|
|
|
|
|
Named Executive Officer |
|
Cash Awards |
|
Ann G. Fox |
|
$ |
1,170,680 |
|
David Crombie |
|
$ |
724,985 |
|
Guy Sirkes |
|
$ |
548,547 |
|
Theodore R. Moore |
|
$ |
548,547 |
|
2022 Performance Cash Awards
On May 3, 2022, our Named Executive Officers, were granted performance-based cash awards, which vest upon the Nominating, Governance and Compensation Committee’s certification of the level of achievement of certain performance goals, based on relative total shareholder return, subject to the continued service of our Named Executive Officers through the date of such certification. The awards are divided into three equal tranches, each of which is eligible to vest over a one-year performance period such that the award would be fully vested after three years if all of the performance metrics are satisfied. Payout of the award ranges from 0% to 200% of the target value. The first tranche of these performance-based cash awards, representing approximately one-third of the total award, vested on May 3, 2023. The grant date target value of the full award, payout
31
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The Board has adopted a written related person transactions policy, under which a “Related Person Transaction” is defined pursuant to Item 404 of Regulation S-K. Pursuant to this policy, the Audit Committee expects to review all material facts of all Related Person Transactions and either approve or disapprove entry into the Related Person Transaction, subject to certain limited exceptions.
In determining whether to approve or disapprove entry into a Related Person Transaction, the Audit Committee expects to take into account, among other factors, the following: (i) whether the Related Person Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and (ii) the extent of the Related Person’s interest in the transaction. Further, the policy requires that all Related Person Transactions required to be disclosed in our filings with the SEC be so disclosed in accordance with applicable laws, rules and regulations.
The Company leases office space, yard facilities, and equipment and purchases building maintenance and repair services from entities owned by David Crombie, an executive officer of the Company. Total lease expense and building maintenance and repair expense associated with these entities was $1.3 million for both the years ended December 31, 2023 and 2022. The Company also purchased $2.9 million and $2.6 million of products and services for the years ended December 31, 2023 and 2022, respectively, from an entity in which Mr. Crombie is a limited partner. There were outstanding payables due to these entities of $0.2 million and $0.1 million at December 31, 2023 and 2022, respectively.
In addition, the Company completed leasing office space in Corpus Christi, Texas at the end of 2023 and previously leased office space in Midland, Texas from an entity (the “Leasing Entity”) affiliated with Warren Lynn Frazier, who is a 5% Stockholder. From the third quarter of 2020 through mid-2022, another entity affiliated with Mr. Frazier sub-leased a portion of such space in Corpus Christi, Texas from the Company. Total rental expense associated with these office spaces, net of sub-leasing income, was $1.2 million and $1.6 million for the years ended December 31, 2023 and 2022, respectively. There were no net outstanding payables due to the Leasing Entity at December 31, 2023 and $0.1 million at December 31, 2022.
On June 30, 2020, the Company issued promissory notes with an aggregated principal amount of $2.3 million (the “Magnum Promissory Notes”) to the sellers of Magnum Oil Tools International, LTD, Magnum Oil Tools GP, LLC, and Magnum Oil Tools Canada Ltd., including Warren Lynn Frazier, who is a 5% Stockholder. The Magnum Promissory Notes bear interest at a rate of 6.0% per annum. At December 31, 2023, there was no outstanding principal balance payable to Mr. Frazier as the balance payable to Mr. Frazier of $1.1 million at December 31, 2021 was paid during 2022. For additional information regarding the Magnum Promissory Notes, see Note 9 to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
The Company provides products and rentals to National Energy Reunited Corp. (“NESR”), where Andrew L. Waite, one of the Company’s directors, serves as a director. The Company billed NESR $1.5 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively. During the fourth quarter of 2019, the Company sold coiled tubing equipment for $5.9 million to NESR with payments due in 24 monthly equal installments on January 31, 2020. Total outstanding receivables due to the Company from NESR were $0.4 million and $0.2 million at December 31, 2023 and 2022, respectively.
Ann G. Fox, President and Chief Executive Officer and a director of the Company, is a director of Devon Energy Corporation (“Devon”). The Company generated revenue from Devon of $3.0 million and $2.2 million for the years ended December 31, 2023 and 2022, respectively. There were outstanding receivables due from Devon of $0.7 million and $0.5 million at December 31, 2023 and 2022, respectively.
43
EXPENSES OF SOLICITATION
The accompanying proxy is solicited by and on behalf of the Board, and the cost of such solicitation will be borne by the Company, including the cost of the preparation, assembly, printing, mailing and posting of the Proxy Materials and any additional information furnished to our stockholders in connection with the Annual Meeting. Broadridge Financial Solutions (“Broadridge”) will distribute proxy materials to beneficial owners of common stock held on the record date by such persons on behalf of banks, brokers and other nominees. AST Financial will distribute proxy materials to registered shareholders and will also provide voting and tabulation services for the Annual Meeting. We also have retained D.F. King & Co., Inc. (“D.F. King”) to aid in the distribution of Proxy Materials. D.F. King may also solicit proxies by personal interview, mail, telephone and electronic communication. For these services, we will pay D.F. King a fee of approximately $9,500 and reimburse it for certain expenses. Solicitations also may be made by personal interview, mail, telephone, and electronic communications by directors, officers, and other employees of the Company. These persons will not receive any additional compensation for assisting in the solicitation but may be reimbursed for reasonable out-of-pocket expenses in connection therewith.
OTHER MATTERS
As of the date of this Proxy Statement there are no other matters that we intend to present, or have reason to believe others will present, at the Annual Meeting. If, however, other matters properly come before the Annual Meeting, the accompanying proxy authorizes the persons named as proxies or their substitutes to vote on such matters as they determine appropriate.
PROPOSALS OF STOCKHOLDERS
To be considered for inclusion in the proxy statement and proxy card for the 2025 Annual Meeting of Stockholders of the Company (the “2025 Annual Meeting”), proposals of stockholders must be submitted in writing to the Company’s Secretary, at the address of our principal executive offices (see page 1 of this Proxy Statement), and must contain the information required by, and otherwise comply with, Rule 14a-8 under the Exchange Act. Generally, such proposals are due 120 days before the anniversary of the date we release our proxy materials for the prior year; however, if the date of the annual meeting has been changed by more than 30 days from the date of the previous year’s meeting, then the deadline is a reasonable time before we begin to print and send our proxy materials. We currently expect to hold the 2025 Annual Meeting within 30 days of May 3, 2025. Therefore, we have determined that Rule 14a-8 shareholder proposals must be received by the Company at its principal executive offices no later than November 15, 2024 unless otherwise announced by the Company prior to the 2025 Annual Meeting. The submission of a stockholder proposal does not guarantee that it will be included in our proxy statement.
In addition, our Bylaws contain advance notice procedures applicable to stockholders desiring to nominate a person as a director or propose business to be considered by stockholders at an annual meeting of stockholders, other than pursuant to Rule 14a-8 under the Exchange Act. These advance notice provisions require that, among other things, stockholders give timely written notice to the Company’s Secretary regarding such nominations or proposals and provide the information and satisfy the other requirements set forth in our Bylaws. To be timely, a stockholder who intends to present nominations or proposals at the 2025 Annual Meeting other than pursuant to Rule 14a-8 must provide the information set forth in our Bylaws to the Company’s Secretary no earlier than the close of business January 3, 2025 and no later than the close of business February 2, 2025. However, if we hold the 2025 Annual Meeting more than 30 days before or after the anniversary of this Annual Meeting date, then the information must be received not earlier than the close of business on the 120th day prior to the 2025 Annual Meeting date and not later than the close of business of (i) the 90th day prior to the 2025 Annual Meeting date or (ii) the tenth day after public disclosure of the 2025 Annual Meeting date, whichever is later. If a stockholder fails to meet these deadlines and fails to satisfy the requirements of Rule 14a-4 under the Securities Exchange Act of 1934, we may exercise discretionary voting authority under proxies we solicit to vote on any such proposal as we determine appropriate. In addition, to comply with the universal proxy rules, stockholders who
44
Pay vs Performance Disclosure - USD ($)
|
12 Months Ended |
Dec. 31, 2023 |
Dec. 31, 2022 |
Pay vs Performance Disclosure |
|
|
Pay vs Performance Disclosure, Table |
The following table sets forth certain information with respect to the Company’s financial performance and the compensation paid to our NEOs for the fiscal years ended on December 31, 2022 and December 31, 2023, in accordance with the SEC disclosure requirements for a smaller reporting company as set forth in Item 402(v)(8) of Regulation S-K. The dollar amounts presented as compensation actually paid in the Pay Versus Performance Table do not reflect the actual amount of compensation earned by or paid to the Company’s PEO and NEOs during the applicable fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total for PEO (1) |
|
|
Compensation Actually Paid to PEO (1)(2) |
|
|
Average Summary Compensation Table Total for Non-PEO NEOs (3) |
|
|
Average Compensation Actually Paid to Non-PEO NEOs (3)(2) |
|
|
Value of Initial Fixed $100 Investment Based On |
|
|
|
|
|
Total Shareholder Return (4) |
|
2023 |
|
$ |
3,362,060 |
|
|
$ |
(1,077,996 |
) (6) |
|
$ |
1,731,090 |
|
|
$ |
(370,360 |
) (6) |
|
$ |
268 |
|
|
$ |
(32,213,000 |
) |
2022 |
|
$ |
2,022,259 |
|
|
$ |
7,660,051 |
(7) |
|
$ |
1,121,278 |
|
|
$ |
3,785,758 |
(7) |
|
$ |
1,453 |
|
|
$ |
14,393,000 |
|
(1) |
The name of the Principal Executive Officer of the Company (“PEO”) reflected in these columns for each of the applicable fiscal years is Ann G. Fox. |
(2) |
In calculating the “compensation actually paid” amounts reflected in these columns, the fair value or change in fair value, as applicable, of the equity award adjustments included in such calculations was computed in accordance with FASB ASC Topic 718. The valuation assumptions used to calculate such fair values did not materially differ from those disclosed at the time of grant. |
(3) |
The names of each of the non-PEO NEOs reflected in these columns for 2022 and 2023 are David Crombie, Theodore R. Moore and Guy Sirkes. |
(4) |
The Company total shareholder return (“TSR”) reflected in this column for each applicable fiscal year is calculated based on a fixed investment of $100 at the applicable measurement point on the same cumulative basis as is used in Item 201(e) of Regulation S-K. |
(5) |
Represents the amount of net income reflected in the Company’s audited GAAP financial statements for each applicable fiscal year. |
(6) |
For fiscal year 2023, the “compensation actually paid” to the PEO and the “average compensation actually paid” to the non-PEO NEOs reflected each of the following adjustments made to the total compensation amount reported in the Summary Compensation Table for fiscal 2023, computed in accordance with Item 402(v) of Regulation S-K: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2023 Average Non- PEO NEOs |
|
Total Compensation Reported in 2023 Summary Compensation Table |
|
$ |
3,362,060 |
|
|
$ |
1,731,090 |
|
Less, Grant Date Fair Value of Stock & Option Awards Reported in the 2023 Summary Compensation Table |
|
$ |
(446,121 |
) |
|
$ |
(211,302 |
) |
Plus, Year-End Fair Value of Awards Granted in 2023 that are Outstanding and Unvested |
|
$ |
340,628 |
|
|
$ |
161,336 |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year-End to Year-End) |
|
$ |
(2,185,093 |
) |
|
$ |
(1,035,366 |
) |
Plus, Vesting Date Fair Value of Awards Granted in 2023 that Vested in 2023 |
|
|
— |
|
|
|
— |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that Vested in 2023 (From Prior Year-End to Vesting Date) |
|
$ |
(2,149,470 |
) |
|
$ |
(1,016,118 |
) |
Less, Prior Year-End Fair Value of Awards Granted in Prior Years that Failed to Vest in 2023 |
|
|
— |
|
|
|
— |
|
Plus, Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock & Option Awards in 2023 prior to Vesting (if not reflected in the fair value of such award or included in Total Compensation for 2023) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid for the Covered Fiscal Year |
|
|
|
|
|
|
|
|
(7) |
For fiscal year 2022, the “compensation actually paid” to the PEO and the “average compensation actually paid” to the non-PEO NEOs reflected each of the following adjustments made to the total compensation amount reported in the Summary Compensation Table for fiscal 2022, computed in accordance with Item 402(v) of Regulation S-K: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2022 Average Non-PEO NEOs |
|
Total Compensation Reported in 2022 Summary Compensation Table |
|
$ |
2,022,259 |
|
|
$ |
1,121,278 |
|
Less, Grant Date Fair Value of Stock & Option Awards Reported in the 2022 Summary Compensation Table |
|
$ |
(361,200 |
) |
|
$ |
(171,173 |
) |
Plus, Year-End Fair Value of Awards Granted in 2022 that are Outstanding and Unvested |
|
$ |
1,874,370 |
|
|
$ |
888,267 |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year-End to Year-End) |
|
$ |
3,747,932 |
|
|
$ |
1,772,223 |
|
Plus, Vesting Date Fair Value of Awards Granted in 2022 that Vested in 2022 |
|
|
— |
|
|
|
— |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that Vested in 2022 (From Prior Year-End to Vesting Date) |
|
$ |
376,690 |
|
|
$ |
175,163 |
|
Less, Prior Year-End Fair Value of Awards Granted in Prior Years that Failed to Vest in 2022 |
|
|
— |
|
|
|
— |
|
Plus, Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock & Option Awards in 2022 prior to Vesting (if not reflected in the fair value of such award or included in Total Compensation for 2022) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid for the Covered Fiscal Year |
|
|
|
|
|
|
|
|
|
|
Named Executive Officers, Footnote |
The names of each of the non-PEO NEOs reflected in these columns for 2022 and 2023 are David Crombie, Theodore R. Moore and Guy Sirkes.
|
|
PEO Total Compensation Amount |
$ 3,362,060
|
$ 2,022,259
|
PEO Actually Paid Compensation Amount |
$ (1,077,996)
|
7,660,051
|
Adjustment To PEO Compensation, Footnote |
(6) |
For fiscal year 2023, the “compensation actually paid” to the PEO and the “average compensation actually paid” to the non-PEO NEOs reflected each of the following adjustments made to the total compensation amount reported in the Summary Compensation Table for fiscal 2023, computed in accordance with Item 402(v) of Regulation S-K: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2023 Average Non- PEO NEOs |
|
Total Compensation Reported in 2023 Summary Compensation Table |
|
$ |
3,362,060 |
|
|
$ |
1,731,090 |
|
Less, Grant Date Fair Value of Stock & Option Awards Reported in the 2023 Summary Compensation Table |
|
$ |
(446,121 |
) |
|
$ |
(211,302 |
) |
Plus, Year-End Fair Value of Awards Granted in 2023 that are Outstanding and Unvested |
|
$ |
340,628 |
|
|
$ |
161,336 |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year-End to Year-End) |
|
$ |
(2,185,093 |
) |
|
$ |
(1,035,366 |
) |
Plus, Vesting Date Fair Value of Awards Granted in 2023 that Vested in 2023 |
|
|
— |
|
|
|
— |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that Vested in 2023 (From Prior Year-End to Vesting Date) |
|
$ |
(2,149,470 |
) |
|
$ |
(1,016,118 |
) |
Less, Prior Year-End Fair Value of Awards Granted in Prior Years that Failed to Vest in 2023 |
|
|
— |
|
|
|
— |
|
Plus, Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock & Option Awards in 2023 prior to Vesting (if not reflected in the fair value of such award or included in Total Compensation for 2023) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid for the Covered Fiscal Year |
|
|
|
|
|
|
|
|
(7) |
For fiscal year 2022, the “compensation actually paid” to the PEO and the “average compensation actually paid” to the non-PEO NEOs reflected each of the following adjustments made to the total compensation amount reported in the Summary Compensation Table for fiscal 2022, computed in accordance with Item 402(v) of Regulation S-K: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2022 Average Non-PEO NEOs |
|
Total Compensation Reported in 2022 Summary Compensation Table |
|
$ |
2,022,259 |
|
|
$ |
1,121,278 |
|
Less, Grant Date Fair Value of Stock & Option Awards Reported in the 2022 Summary Compensation Table |
|
$ |
(361,200 |
) |
|
$ |
(171,173 |
) |
Plus, Year-End Fair Value of Awards Granted in 2022 that are Outstanding and Unvested |
|
$ |
1,874,370 |
|
|
$ |
888,267 |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year-End to Year-End) |
|
$ |
3,747,932 |
|
|
$ |
1,772,223 |
|
Plus, Vesting Date Fair Value of Awards Granted in 2022 that Vested in 2022 |
|
|
— |
|
|
|
— |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that Vested in 2022 (From Prior Year-End to Vesting Date) |
|
$ |
376,690 |
|
|
$ |
175,163 |
|
Less, Prior Year-End Fair Value of Awards Granted in Prior Years that Failed to Vest in 2022 |
|
|
— |
|
|
|
— |
|
Plus, Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock & Option Awards in 2022 prior to Vesting (if not reflected in the fair value of such award or included in Total Compensation for 2022) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid for the Covered Fiscal Year |
|
|
|
|
|
|
|
|
|
|
Non-PEO NEO Average Total Compensation Amount |
$ 1,731,090
|
1,121,278
|
Non-PEO NEO Average Compensation Actually Paid Amount |
$ (370,360)
|
3,785,758
|
Adjustment to Non-PEO NEO Compensation Footnote |
(6) |
For fiscal year 2023, the “compensation actually paid” to the PEO and the “average compensation actually paid” to the non-PEO NEOs reflected each of the following adjustments made to the total compensation amount reported in the Summary Compensation Table for fiscal 2023, computed in accordance with Item 402(v) of Regulation S-K: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2023 Average Non- PEO NEOs |
|
Total Compensation Reported in 2023 Summary Compensation Table |
|
$ |
3,362,060 |
|
|
$ |
1,731,090 |
|
Less, Grant Date Fair Value of Stock & Option Awards Reported in the 2023 Summary Compensation Table |
|
$ |
(446,121 |
) |
|
$ |
(211,302 |
) |
Plus, Year-End Fair Value of Awards Granted in 2023 that are Outstanding and Unvested |
|
$ |
340,628 |
|
|
$ |
161,336 |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year-End to Year-End) |
|
$ |
(2,185,093 |
) |
|
$ |
(1,035,366 |
) |
Plus, Vesting Date Fair Value of Awards Granted in 2023 that Vested in 2023 |
|
|
— |
|
|
|
— |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that Vested in 2023 (From Prior Year-End to Vesting Date) |
|
$ |
(2,149,470 |
) |
|
$ |
(1,016,118 |
) |
Less, Prior Year-End Fair Value of Awards Granted in Prior Years that Failed to Vest in 2023 |
|
|
— |
|
|
|
— |
|
Plus, Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock & Option Awards in 2023 prior to Vesting (if not reflected in the fair value of such award or included in Total Compensation for 2023) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid for the Covered Fiscal Year |
|
|
|
|
|
|
|
|
(7) |
For fiscal year 2022, the “compensation actually paid” to the PEO and the “average compensation actually paid” to the non-PEO NEOs reflected each of the following adjustments made to the total compensation amount reported in the Summary Compensation Table for fiscal 2022, computed in accordance with Item 402(v) of Regulation S-K: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2022 Average Non-PEO NEOs |
|
Total Compensation Reported in 2022 Summary Compensation Table |
|
$ |
2,022,259 |
|
|
$ |
1,121,278 |
|
Less, Grant Date Fair Value of Stock & Option Awards Reported in the 2022 Summary Compensation Table |
|
$ |
(361,200 |
) |
|
$ |
(171,173 |
) |
Plus, Year-End Fair Value of Awards Granted in 2022 that are Outstanding and Unvested |
|
$ |
1,874,370 |
|
|
$ |
888,267 |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year-End to Year-End) |
|
$ |
3,747,932 |
|
|
$ |
1,772,223 |
|
Plus, Vesting Date Fair Value of Awards Granted in 2022 that Vested in 2022 |
|
|
— |
|
|
|
— |
|
Plus, Change in Fair Value of Awards Granted in Prior Years that Vested in 2022 (From Prior Year-End to Vesting Date) |
|
$ |
376,690 |
|
|
$ |
175,163 |
|
Less, Prior Year-End Fair Value of Awards Granted in Prior Years that Failed to Vest in 2022 |
|
|
— |
|
|
|
— |
|
Plus, Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock & Option Awards in 2022 prior to Vesting (if not reflected in the fair value of such award or included in Total Compensation for 2022) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid for the Covered Fiscal Year |
|
|
|
|
|
|
|
|
|
|
Compensation Actually Paid vs. Total Shareholder Return |
Compensation Actually Paid and Company TSR The Compensation Actually Paid vs. TSR graph below depicts the amount of “compensation actually paid” to our PEO and the average amount of “compensation actually paid” to our Non-PEO NEOs over the two years from fiscal year 2022 through fiscal year 2023. As demonstrated by the graph, the amount of “compensation actually paid” to the PEO and the average amount of “compensation actually paid” to the non-PEO NEOs is generally aligned with the Company’s TSR over the two years presented in the table. As reflected in the graph below, the Company’s TSR and the amount of “compensation actually paid” to the PEO and the average amount of “compensation actually paid” to the non-PEO NEOs declined significantly in fiscal year 2023, primarily due to a steep increase in the Company’s stock price in fiscal year 2022 followed by a steep decrease in the Company’s stock price in fiscal year 2023.
|
|
Compensation Actually Paid vs. Net Income |
Compensation Actually Paid and Net Income The Compensation Actually Paid vs. Net Income graph below depicts the amount of “compensation actually paid” to our PEO and the average amount of “compensation actually paid” to our Non-PEO NEOs over the two years from fiscal year 2022 through fiscal year 2023. As demonstrated by the graph, the amount of “compensation actually paid” to the PEO and the average amount of “compensation actually paid” to the non-PEO NEOs is generally aligned with the Company’s net income over the two years presented in the table. As discussed above, the “compensation actually paid” to our NEOs increased in fiscal year 2022 and declined in fiscal year 2023, which was primarily due to a steep increase in the Company’s stock price in 2022 followed by a steep decrease in the Company’s stock price in fiscal year 2023.
|
|
Total Shareholder Return Amount |
$ 268
|
1,453
|
Net Income (Loss) |
$ (32,213,000)
|
14,393,000
|
PEO Name |
Ann G. Fox
|
|
PEO |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
$ (4,440,056)
|
5,637,792
|
PEO | Grant Date Fair Value of Stock Option Awards [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(446,121)
|
(361,200)
|
PEO | Year End Fair Value of Awards Granted that are Outstanding and Unvested [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
340,628
|
1,874,370
|
PEO | Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year End to Year End) [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(2,185,093)
|
3,747,932
|
PEO | Vesting Date Fair Value of Awards Granted [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
0
|
0
|
PEO | Change in Fair Value of Awards Granted in Prior Years that Vested [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(2,149,470)
|
376,690
|
PEO | Prior Year End Fair Value of Awards Granted in Prior Years that Failed to Vest [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
0
|
0
|
PEO | Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock Option Awards [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
0
|
0
|
Non-PEO NEO |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(2,101,450)
|
2,664,480
|
Non-PEO NEO | Grant Date Fair Value of Stock Option Awards [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(211,302)
|
(171,173)
|
Non-PEO NEO | Year End Fair Value of Awards Granted that are Outstanding and Unvested [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
161,336
|
888,267
|
Non-PEO NEO | Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (From Prior Year End to Year End) [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(1,035,366)
|
1,772,223
|
Non-PEO NEO | Vesting Date Fair Value of Awards Granted [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
0
|
0
|
Non-PEO NEO | Change in Fair Value of Awards Granted in Prior Years that Vested [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
(1,016,118)
|
175,163
|
Non-PEO NEO | Prior Year End Fair Value of Awards Granted in Prior Years that Failed to Vest [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
0
|
0
|
Non-PEO NEO | Dollar Value of Dividends, Dividend Equivalents or other Earnings Paid on Stock Option Awards [Member] |
|
|
Pay vs Performance Disclosure |
|
|
Adjustment to Compensation, Amount |
$ 0
|
$ 0
|